The Personal & Household Services (PHS) Sector

Empowering People. Strengthening Families. Building Inclusive Growth.

What is the Personal & Household Services Sector?

Personal and Household Services (PHS) cover a wide range of activities that directly contribute to the well-being and quality of life of families and individuals. They include both care-related services and household support services, ensuring that people receive the right support at home, whether for daily living, personal development, or long-term care needs. It brings together the following services:

Care Related Services:

- Elderly and disability care, long-term care
- Childcare and early childhood education

Household support services:

- Cleaning, ironing, home maintenance, gardening

Personal and Household Services (PHS) are distinct because they take place within private homes, creating both opportunities and challenges unlike those of traditional workplaces.

A service like home cleaning can form part of broader care for an elderly or disabled person, or support a family’s work-life balance, often enabling women’s participation in the labour market. Though care and household support services have different aims, they share a common purpose: improving quality of life at home.

Care services focus on people with specific needs and require specialised skills.
Household support services help families manage daily life more easily and enhance well-being.

Personal and Household Services (PHS) are distinct because they take place within private homes, creating both opportunities and challenges unlike those of traditional workplaces.

Why does the PHS Sector Matter?

Supporting Society

Responds to ageing populations and evolving care needs
Enables work-life balance and strengthens family resilience
Helps reconcile professional and private life

Creating Jobs & Growth

A key employment generator in Europe
Stimulates formal job creation, particularly for women
They generate positive economic effects, including “earn-back” benefits for governments through job creation and reduced undeclared work

Promoting Equality & Inclusion

Encourages gender equality by supporting women’s employment
Strengthens social inclusion through professionalisation and fair work
Enhances community well-being and care continuity

Understanding the PHS Framework

To grow sustainably, the PHS sector must balance demand, supply, and policy environment.

Demand-Side

Households face cost barriers, limited awareness, and cultural biases. Many services remain informal, missing out on quality and worker protections. The demand usually comes from: families, the elderly, or people with disabilities in need of support, and long-term care needs. Households typically outsource when the cost of paying for a service is lower than the value of their own time spent doing it.

Supply-Side

Providers struggle with high formalisation costs, workforce shortages, and inconsistent quality standards.

Public Authorities

Governments can reduce market failures with tax incentives, vouchers, training programmes, and quality regulations.

Public policy makes the difference when done right, it converts undeclared work into decent work and unlocks large-scale employment potential.

The Key Challenge of Undeclared Work

For the potential of the sector to translate into sustainable jobs, working conditions, and formalisation are key elements to consider. Incentives to reduce undeclared work, fair wages, and professionalisation are essential to make PHS an attractive and secure employment path.

PHS is not only meeting essential social needs, but it is also a rising pillar of Europe’s job market and a sector with enormous growth potential. Without the right policies, many Personal and Household Services (PHS) risk being provided in the undeclared economy.

Undeclared labour is cheaper than formal services, where wages are taxed and contributions are due. In some countries, undeclared work is still socially tolerated, and its PHS is sometimes seen as a type of unvalued work that does not really need to be declared. Since most of the service cost is wages, taxes, and contributions, making formal PHS comparatively more expensive.

While cheaper in the short term, undeclared PHS come with serious downsides:

For workers, there is no social security or pension rights, precarious working conditions, and no legal protection.
For governments, there is a loss of tax revenues, reduced social contributions, and weaker public finances
For society, lower service quality, safety standards, and an economy that misses out on sustainable job creation.

As indicated in the previous section, several trends tend to increase the need for PHS. However, there are several obstacles that explain why households do not externalise more to formal service providers:

Without supporting policies, the price in the formal market might be too high for consumers, especially given that households do not take into account the positive externalities (see next point) related to their use of PHS.
In some countries, cultural barriers exist that prevent, , the outsourcing of domestic work. For example, there may be a lack of social acceptance with regard to externalising PHS, or difficulties with accepting an unknown person into the home.
An additional difficulty could be the accessibility of these services. Indeed, some countries may have few services providers and/or the services providers may not be spread equally across the territory, which could mean that some households have difficulty accessing services.
Another difficulty is the issue of unobserved quality, quality uncertainty and a lack of quality guarantee. Indeed, when no formal scheme guarantees a given level of quality and reliability of the services provided, this might stop the household from making use of the services.
Finally, a last limitation is the difficulty in assuming the role of employer.